February 5, 2019

Fellow Instructors,

The Company has formally requested early negotiations in accordance with Section Six of the Railway Labor Act. Captain Carl Kuwitsky, Senior Director of Labor Relations, via email, and in a hand delivered letter, dated February 1, 2019,  formally asked TWU 557 to enter early negotiations to establish a new bargaining agreement for Flight Crew Training Instructors. The Company suggested that we begin talks during the second quarter of 2019. Your TWU Executive Board responded in the affirmative, via formal letter, also hand delivered, that we would meet soon with the Company to establish the frame work for negotiating talks. Your Board has been preparing for future negotiations since the middle of last year and is in the process of continued planning, training, and detailed preparation. We anticipate serious bargaining talks to begin in May of this year. 

For the Board,

"Jerry"

Gerald H. Bradley

President, TWU 557

Southwest Airlines Flight Crew Training Instructors

Dear fellow instructors:                                                        January 28, 2019

As the month of January quickly comes to a close it’s obvious that we’re off to another busy year.  Likewise, it’s been a very active and productive month for your TWU 557 board and contract negotiating team.  I’ve got six items to address so I’ll apologize in advance for the length of this epistle (though I’m not known for brevity even without apologies).

1. After an extensive search by Joe Gautelle, we’ve located suitable office space,^[1] have moved existing furnishings and purchased additional items to support our growing organization.  Utilizing our new facilities, we conducted two days of negotiating planning sessions and a board of directors meeting.^[2]

Your negotiating team, consisting of Teak Biondo, Jeff Yeaton , Sam Stoterau and the four board members (Jerry, Jim, Mike and Joe) worked in conjunction with the TWU National representative Jose Galarza to compile previously acquired data, plan future survey requests and strategize negotiating objectives.  Additionally, we began a critical review of contract language with the intent of addressing and updating, virtually, every section of our collective bargaining agreement (CBA)^[3].  We have another two-day session planned for February as well as training with the National Labor Relations Board (NLRB) scheduled for early March.  All this is in anticipation of a formal request by the company to open section six negotiations, which we anticipate before the amendable date. 

The net result of all this is that we still need your input.  Expect another survey to be available shortly narrowing down some of the areas of interest that you have for the upcoming contract.  Additionally, let us know of other concerns and suggestions (in writing, if you will) that you think need be addressed in our next contract. 

2. Other items of import include the election cycle of two board positions, vice president and member-at-large.  As you may recall, per our by-laws, the election cycle is on staggered years for president and secretary/treasurer and the following year for vice president and member-at-large.  All positions are for a three-year term.  Since the member-at-large position was a newly established office the last election, it was initially for a one-year term to coincide with the VP election.  Consequently, in accordance with our local by-laws, we will be opening nominations for both offices February 15th to close March 2^nd.  This will be followed by an election period through a third party host, ballot point^[4], commencing March 17^th and closing March 31^st with the term of office to commence April 2.

Realizing that’s all pretty wordy, the point is; if you’re interested in running for office, let someone know and, since the ballot information will be mailed to your home address, please insure that the one we have for you is up to date.  More information will be posted on the nomination and election process shortly.

3. Our testing format for the web based event trade/giveaway procedure is proving well received and successful.  January has seen upwards of 70% of events transacted on the TWU557 web site.  We will continue using both the paper system and the web postings through February.  At that time, we’ll decide if we’re going to exclusively use one or the other, or perhaps keep both in place.  As mentioned, the system has been working pretty seamlessly, however, there are a few reminders that need to be made.
4. It’s been requested by scheduling that when a trade or giveaway has been transacted, the initiator of the event show that it’s no longer available.  Our web master, Gordy Purcey suggests that once the trade is complete, you open your post, choose “edit” and select the “checkmark” topic icon.  This will help others know the status of the trade.
5. Since one of the goals of the web based system was to limit the traffic on the “wnco” email, please try and avoid doing so. 

4. Also on the technological front, Dave Cooksey is working on a user friendly communication app for the dissemination of      union information via text.  This will be an “opt out” option if you chose not to participate but we see it as a valuable information source as we move into negotiations.  More information will be forthcoming on the developments as they are available. 

5. As you’ve seen from the Company financial results we met and exceed the ROIC^[5] target for 2018 which triggered a contractual .05% base pay increase commencing March 1^st.  This is, obviously, great news for all of us and bodes well for the financial position of SWA.  Gary Kelly pointed out at the quarterly labor financial briefing that we are in a very strong cash position and are reducing our debt.  This, likewise, puts our group in a stronger position going into contract negotiations.  On the negative side, he also was quick to point out the “doom and gloom” picture (as Herb was always want to do) of rising costs and aggressive competition.  All that said, we’re still going to be facing a headwind in negotiations. 

6. Sadly, we bid farewell to a couple of our instructors.  Pete Breen has returned to the line after reacquiring his FAA medical.  Although we’ll miss his expertise and great demeanor, it’s exciting to see him get back to what we all love.  Roy Milke has also opted to leave us through retirement and will return to Phoenix with his family.  Thought we hate seeing both of the leave, we wish them best of fortune in the future.  As you know, we’re in the process of hiring additional instructors.  As Ken has requested, if you know someone that would be a good fit at LUV, encourage them to apply.

As always, we’re here to represent you; if you have questions or issues, please contact one of your board members.  Additionally, if you have areas of concern that you thing need addressed contractually, send an email of note to one of us…it will get far faster response that simply complaining about it. 

                                                                        Best regards to all, for the BOD, Jim Baird

^[1] Located at 8500 Stemmons Fwy, Dallas, TX 75247

^[2] Board meeting minutes posted on the TWU557.org web site.

^[3] Our current CBA is amendable Dec 31, 2019

^[4] http://ballotpoint.com/ serves as the posting and clearinghouse for election votes and results.

^[5] Actual Return on Invested Capital @23.6%, our targeted profitability trigger was 15%

UPDATE ADDENDUM

 My friends, after posting our January member update last night, it's been pointed out that I've made a made a glaring omission in my post.  In recognizing our instructors who are moving on from the Training Center, I failed to  acknowledge that one of the stalwarts of our team will be officially retiring at the end of this month.  After seventeen years of dedicated service to our pilots and training organization, Tom Smith has decided to take on a more relaxed lifestyle (as opposed to working 29 to 30 days a month) and retire in Seattle.  We will certainly miss his supreme knowledge, dedication, work ethic and willingness to help.  A true man of character and integrity, Tom will be missed.  I speak not only from the TWU board but, I believe, the entire instructor corps in wishing Tom a joyous and well deserved retirement.  Jim

SWA Mourns the Passing of Former CEO Jim Parker
 

From the Wall Street Journal

Southwest Airlines Beats Earnings Expectations

The carrier says the government shutdown has had a negative sales impact of $10 million to $15 million thus far in January

The largest carrier of U.S. domestic passengers said profit for the quarter was $654 million, or $1.17 a share, compared with $1.75 billion, or $2.94 a share a year earlier. Analysts were expecting a per-share profit of $1.08.

Unit revenue—a key metric of the amount taken in for each passenger flown a mile—rose by 1.8% from a year ago. Its operating revenue increased by 8.5% to $5.7 billion. Analysts surveyed by Refinitiv expected $5.67 billion.

The higher passenger yield offset a 1.5 percentage point decline in its load factor.

Southwest said the partial government shutdown is estimated to have had a negative sales impact of $10 million to $15 million thus far in January.

Based on that trend and assuming no further significant effect on booking from the shutdown, revenue per available seat mile is expected to jump 4% to 5% in the first quarter, the company said Thursday.

“Based on current revenue trends, our cost outlook, and energy futures, we are currently expecting a strong first quarter 2019 financial performance,” Chief Executive Gary Kelly said in prepared remarks.

The company said that passenger demand was healthy and close-in bookings and corporate travel remain strong.

For the period ended Dec. 31, the Dallas-based carrier said its unit costs rose 1.5%. Southwest said fuel costs were higher than a year ago at $2.25 a gallon, from $2.16 a gallon.

Southwest forecast unit costs, excluding fuel and oil expenses, will climb 6% in the first quarter and 3% to 3.5% in 2019. Yet it expects fuel costs to moderate in the next quarter.

Shares of Southwest, which had fallen about 22% in the past 12 months, rose 1% in premarket trading.